Editorial – ELN to campaign on TPI code of conduct

I had the pleasure of hosting a consultants event run by Haven Power yesterday at Drax power station in Yorkshire. The theme was exploring the policy framework of the energy sector as we head to a low carbon future but unsurprisingly, the hot topic of the day was Ofgem’s TPI Code of Conduct.

As you may know we’ve been telling you all about the code since it’s launch last year and today is the deadline for Ofgem’s consultation with the sector over its plans. However it’s clear…. all is unclear about this policy! How will it work? Who will police it? What will the sanctions be? Has the consultation been representative enough?

I have to say the answer to all of the above is err shall we say “unclarified” or perhaps more in keeping with Government speak “in development.”

Maxine Frerk, Partner of Retail Markets and Research at Ofgem was brave enough to reveal the regulator’s sketchy plans to the audience offering three clear scenarios; a voluntary code, a supplier led regulatory body/ ombudsman and finally a full licenced framework.

The first is no more than lip service to the real concern over unscrupulous practices in the brokers market. The final option would mean Ofgem having to find, track, monitor, regulate and punish every brokerage in the country, it simply doesn’t have the resources to do that.

And so Ofgem’s preference, is for the second option – with a regulatory hub led by suppliers who would need to ensure they only do business with the “reputable” players.

But there’s a big problem, suppliers are unlikely to want to become the Sheriffs of Dodgy Broker City, let alone the fundamental conflict as I see it of having a business (supplier), regulating its customers (TPIs), what chance this could become reality? Mmmm lets come back to that one shall we?

The consultation over the last three months was supposed to have heard from the brokering sector, from all areas that are relevant in the debate. But it was very clear hearing from consultants yesterday and from watching Ms Frerk’s response, all is not as it should have been in this consultation…

One broker said his firm had applied to come to one of the many workshops held by Ofgem to give their views but was told there wasn’t room for them. STRIKE ONE! Another consultant said he had attended a consultation only to find they were the only brokers there, the rest of the room was packed with suppliers and price comparison websites. STRIKE TWO! Then the final straw, when it was revealed a broker that operates completely independently, (of any supplier) may find they aren’t able to be sanctioned as “reputable” as they would not be benchmarked/ monitored by a specific supplier. STRIKE THREE!!!!

Now I don’t know about you but this was enough to convince me this consultation hasn’t worked and is in danger of setting up a framework that isn’t right for the industry. So ELN is going to get involved.

The TELCAs were set up last year to improve standards in the consultancy space and reward good practice. Now we are going to take things a stage further.

We will start campaigning to ensure the Code of Conduct works by getting the basics right and that is ensuring Ofgem hears from the people that matter, the brokers and their customers.

Ms Frerk has to her credit said the deadline for consultation will be extend for a week or so, to gauge more opinion but has also committed to appearing on an ELN webinar where we can put your views to her. We will get this organised as soon as possible but more than that, we have a series of TELCA roadshows taking place later this month and we will invite Ofgem to send someone to speak at them.

But most importantly we will be asking for your views and opinions so that we can feed this back to Ofgem. It’s clear the channels they use to engage aren’t working. ELN is read by the whole energy community. So if you have an opinion on the code and what needs to be done, get in touch using this email: [email protected] and we will pass your views on.

ELN’s core is independence and fairness. We want to hold the sector to account but we also want to ensure it is fairly portrayed and I believe by starting this campaign we can do just that.

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4 thoughts on “Editorial – ELN to campaign on TPI code of conduct”

The UIA have been working for a considerable time to try and put this problem right and ELN and the Tpis who are now complaining had their opportunity to submit a response to the consultations to Ofgem which the UIA have done. Having analysed the consultation document with a considerable amount of experience in this market it is relatively easy to see why “all is not as it should be with the consultation” and what the UIA regard as the real problems with it. Talk to six Tpis and they will raise six different issues but the two main ones are fees; and the answer you get on this will depend on the commercial advantage it gives the respective Tpi (whilst still saying it is for the customers’ benefit), the second is that Tpis do not want to pay for regulation but someone has to and Ofgem have side stepped this issue completely. Ofgem is basically funded by suppliers and according to the consultation cannot collect monies from Tpis so how would they solve the funding issue? in addition, Ofgem have always stated that they have no remit in the Tpi Market yet here they are trying to gain control of the market in a dubious roundabout way. The main issue for the UIA is that it does not believe that Ofgem has the legal remit to do what it is doing and should simply apply to licence and regulate.

You state ” ELN is going to get involved” but is this really helpful, especially as ELN display a very limited knowledge on the subject and it does appear to be for commercial purposes to promote one of their sponsored events. ELN’s comment regarding sellers regulating buyers is, however, correct and has been made by the UIA many times in the previous consultations and at meetings where it has contributed. All is not clear but it never is in a consultation and anyone wishing to read the UIA response can do so by visiting https://uia.org.uk/consultations.php

ELN’s comments:

Last year the “Code” was NOT “launched” it’s not even been completed as yet.

“…offering three clear scenarios;…… ” The consultation offered FOUR possibilities

“And so Ofgem’s preference, is for the second option – with a regulatory hub led by supplier…” Where in the actual consultation does it state that the hub would be led by suppliers?

The workshops were a series of 6 and the 30 + contributors were an even mix of Tpis, suppliers and the UIA as a code holder. Many suppliers were omitted too. However, the minutes from these meetings were published by Ofgem for all to see and make comment.

As far as we know there has only been one other meeting and that certainly had more than one Tpi present.

Cleary the last “strike” is fantasy. Where do you think this has come from?

Perhaps ELN would enlighten the UIA about these “basics” that they are going to “get right” and whether it will be ELN’s independent initiative or sponsored?

Gillian thanks very much for your response and it’s great to see UIA getting involved. I find it odd that you think ELN’s involvement is unhelpful and that we seem to know very little about the issue?

I wonder why you would be against us campaigning? Surely you would welcome us holding Ofgem to task and working for the good of the sector or are you worried we may be stepping on your toes?

We certainly don’t want to do that but its clear to me your message hasn’t quite got through to the TPIs we speak to.

We have more than 1500 on our database and speak to them regularly, I hardly know any that have said they feel the UIA has put their case forward but I’m sure you do. All we are trying to do is make things better for the sector you have nothing to fear from us!

I have already heard from Ofgem who are happy to engage with us to ensure the consultation on this issue is the best for the industry. We will be printing a response from them and hosting a webinar for free and unsponsored for all to get involved. Oh and as for the TPIs whom you believe should stop complaining and get involved, I do feel many have not had any port of call to know how to engage and get their views across.

I will deal with your specific points in a moment but firstly your criticism that ELN are not experts on the code. Yes you’re right we are not but it doesn’t take a genius to sniff a pint of milk and know it’s rancid.

The consultation hasn’t worked from the TPIs we have talked to and certainly that was the view of the 60 or so I met the other week. Perhaps they are all disgruntled and not representative of the wider picture but I’m willing to bet their views are widespread.

So let’s look at your specific points – firstly this was an editorial based on my experience of the session with Maxine Frerk and the audience and my points reflect what was said that day.

The Code of Conduct launch I was referring to was the launch of the scheme which we reported last year. You will see our coverage has always stated it’s a consultation which will report back this summer before it becomes regulation.

Maxine pointed out the three basic scenarios, surely if the “fourth” was that important she might have mentioned it?

You have taken the punishing line out of context, of course not every brokerage needs punishing and why would I think that? The phrase is in the context of full regulation which means monitoring and if needed reprimanding those that fall foul of the regulations.

The hub with suppliers involved is also reflective of the comments said on the day by Ms Frerk, if you think that was the wrong impression it’s best you take that point up with her.

The final strike being “a fantasy” is interesting as once again that is what the audience was told when asked a specific question by a fully independent broker.

FInally you asked me to enlighten you on how ELN will be helping getting the basics right – well we will do this by getting emails from our readers and sending them to Ofgem. We will hold a webinar for interested parties to engage. We will have an Ofgem representative at our roadshows next week and we will work with Ofgem to relay clearly the decisions they make to our audience.

Finally we are not doing this to promote our “sponsored events”. Yes the roadshows next week are part of the TELCA awards and as such npower is the headline sponsor for these events but they were arranged weeks ago and the audience invited well in advance.

ELN has invited SME brokers to the events which are free and editorially led, they are not selling events.

Ofgem will be attending in a capacity to hear feedback from the SME broker sector and we will continue to represent all views and give them a platform here without any commercial involvement.

ELN is editorially independent, this campaign is nothing to do with trying to get money or people to our events. It is for the good of the industry and to represent all views and as such I would be more than happy to have the UIA involved in our webinars and future events.

Perhaps instead of seeing ELN as a threat you should see us as your allies if you really want to represent your members.

Declaring my interest…I’m the Managing Director of British Gas Business.

If there’s going to be a code, and if suppliers are only going to be able to do business with TPIs who adhere to it (both of which I strongly support), then the key issue is going to be who enforces the arrangements.

It can’t be the suppliers. It doesn’t sound like it’s going to be Ofgem. So an independent body with teeth is the only answer I can think of. The ultimate sanction in such a situation could be that a TPI is no longer able to trade. That’s serious stuff and needs proper process.

I’d be happy for us to pay an appropriate share of funding an independent body provided it wasn’t seen as jeopardising its independence in any way.

I’d also be very happy to discuss with people who are interested in the subject. My email is the one you’d guess it would be.

I see from your final paragraph that we have to guess your email address despite your claim to be interested in what readers have to say. This seems to fit well with the fact that you do not even bother to respond to formal letters of complaint about your company even when chased and asked about policy which only someone at your level can answer. Is your contribution simply a P.R. stunt following the latest Ofgem fine?

You are correct in stating that the key to this issue is “Who enforces the arrangements” assuming it is driven by the changes to the suppliers’ licence conditions. It is also clear as the UIA response above noted, that Ofgem do not have the powers or resource to do this and it cannot be the suppliers as the track record of some of them in behaving with honesty and integrity is at best ambiguous!

The independent body or bodies (one to manage the code and changes to it based upon experience gained as a result of operating it, one to enforce it, as they are not the same thing) does indeed need to be seen to be independent of suppliers. Both overtly and covertly in its/their set up, composition and operation.

Consultants and some brokers provide a valuable service in taking dodgy suppliers to task for the disingenuous practices, cultures and policies of some of them towards British industry and commerce. We therefore need to be careful to ensure that a supplier cannot influence the enforcement body and use it to threaten a TPI who has been successful in highlighting that supplier’s disingenuous and perhaps dishonest activities.